Economists expect report of first deflation in 54 years

[Kidlicious]

summary of the article kid provided:

"the sky is falling! The sky is falling! The sky is falling!"

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[Felch]

Imperialism? Militarism? Both are capitalistic off-springs.

Sorry, buddy, but you lost me right there. Capitalism is about how you organize your economy. Hong Kong is capitalist. I've never heard of the Hong Kongese empire, nor do people cower before the legions of Hong Kong. Imperialism and militarism are separate from the free market.

The USSR was all about imperialism and militarism, but opposed to the free market. There's my counter-example.

[Felch]

Kid, you'll note that I actually read your article. It wasn't bad. It just didn't prove your point about free markets versus command economies, since the two cases being illustrated were both Communist.

[AngieC]

It's a natural part of the business cycle. Deflation isn't a crisis - it has winners and losers. The winners are the sensible people who save money and minimize their debt. Reckless speculators who got us into this mess are going to be forced to pay back their debts with more valuable money than they expected, but that's not my problem.

As long as prices drop, a decline in wages won't really matter. Money is not real. If you get paid half as many dollars, but each of those dollars buys twice as much stuff, you're as wealthy as you were before.

Liquidity trap

[Kidlicious]

That article didn't prove your case that planned economies are better than free markets.

What do you call the fact that something was accomplished with a planned economy that has never been accomplished before?

In fact, North Korea is more restrictive than anywhere else in the world, and it failed.

So? The fact remains that the same thing could have been done in NK, but wasn't.

It also didn't prove that free market economies would fail in the event of peak oil.

It's pretty obvious that a free market would fail in the same situation. Hell, look at the free market failing right now and this is nothing compared to a peak oil.

It showed that Cuba survived by adjusting to diminishing resources.

... through central planning. thx

[Kidlicious]

Kid, you'll note that I actually read your article. It wasn't bad. It just didn't prove your point about free markets versus command economies, since the two cases being illustrated were both Communist.

I wouldn't even say that a free market doesn't work as well as a command economy at times. All I'm saying is that capitalism is crisis prone and is the worst system for dealing with crisis.

[Felch]

You're saying it, but you're not proving it. You have no evidence. All you have is an opinion, and so does everybody else. You say "It's pretty obvious that a free market would fail in the same situation." No, it isn't. There's no proof, there's no evidence, there's nothing.

If you're trying to convince me, you failed. Just like North Korea, a planned economy.

[Unimatrix11]

Well, Felch, but ´economic imperialism´ sounds familiar, right? The US/NATO took over the military part, to ensure freedom of trade, which means fair game for all, which means same conditions for all, which means the conditions set by the capitalistic centres (aka ´the west´). Who get along with those is lucky, who´s not cant do anything about it militarily. In fact, if you refuse to participate in the ´free´ market, you are in trouble. Examples would lead off topic in no time, but there are plenty. Lemme just name one, that is not too recent: The Opium Wars.
And military spending is still quite high in the US. So is governmental spending in (continental) europe. In Germany at least, a lot of the stimilus package will come through governmental spendings (mostly renovation of public buildings).

I already said what i think about the USSR: State-capitalism. The state as one big enterprise.

[Unimatrix11]

Well, guys, what does it mean, when an economy ´fails´? I mean, what exactly would manifest such a ´fail´ in your defintions? What qualifies a good economic system as being good in your opinions ?

[Felch]

I already said that calling the USSR capitalist is pretty silly. If words mean whatever you want them to mean, then they mean nothing.

[OzzyKP]

Save your breath Felch. Unimatrix makes interesting points, Kid doesn't.

About what capitalism has to do with WWI (you will slap your forehead, cause this is so obvious): Imperialism? Militarism? Both are capitalistic off-springs.

Imperialism wants ressources, or new markets for -producing goods and sell them with a profit-. The states paid for the protection of the colonies and thus painted them their national colors, but mostly colonialism was private people seeking profit overseas (or, in some cases, state-capitalist enterprises). Now, i dont have to list up all those colonial disputes you can read up on in any history school book, right? It was said, that the million little business disputes between the germans and the englishmen amounted to the greatest reason for war ever.

Militarism: It is in fact true, that after crash of 1873, the economies did not do all that well in europe. How do you get people back in labor, if the private sector fails? Public spending! Today it´s bailouts, yesterday it was keynesanism, and at the end of the 19th and in the 1st half of the 20th century, it was mililtarism. The decicive point of all of which is to increase the state quota, in order to keep up the process of reproducing capital via paid labor. The utitlity-aspect reveals itself as a mere pretext in these situations btw.

Now, i dont really have to show, how these two then impregnated each other and finally lead up to the great war, for which the assassination of crown prince Ferdinand and a jingoistic policy of Conrad von Hötzendorf and Kaiser Wilhelm II. was only the ignition.

I don't dispute the link between capatalism & imperialism (though Felch did provide a good counter-example), but the link to militarism is very week. Nationalism and the many jealousies, desires for revenge and alliances should be the prime movers behind militarism. However much credit you give economic concerns, it seems, that command style economic thinking is to blame, not the free market.

Conduct:

Without the massively enhanced production capabilities of the industrial revolution, which took place under capitalistic conditions, the war would have not turned into a industrial slaughter house for which a whole generation was sacrificed. Without the conditioning of people to the needs of the machine (rather than vice versa), the tremendous ammount of stress could have never been born by the men at the front. Imagine laying under artillery fire for a whole fortnight, even hoping it will not end, for when it does, even worse things will happen. Sounds like the oridinary day in the factory at the day pretty much - only raised to a new level: Long workshifts of labor conditioned by machines (fast, monotone, loud and dirty), always under stress and fear, you might get ´fired´ (!). The machine is your friend, your enemy is human (but so are you). In that sense, WWI even ´refined´ capitalism, as it showed, that people can not be totally submitted to machines, without reaching a state which can only be called insane even within its categories.

So technology, industry, science are all bad things? We should go back to agricultural & pastoral societies of a thousand years ago? Horrible wars and atrocities existed long before machines. I agree that society should be "human centered" but that leads me on the path to more liberty and respect for individuals, not more state control of society.

[Felch]

Well, guys, what does it mean, when an economy ´fails´? I mean, what exactly would manifest such a ´fail´ in your defintions? What qualifies a good economic system as being good in your opinions ?

People having enough economic security that it makes more sense to go to work than it does to rob your neighbor. So long as people are engaged in productive economic behavior, the economy has not failed. If things degenerate to the point that banditry is a growth industry, the economy has failed.

Sound good?

[OzzyKP]

I already said that calling the USSR capitalist is pretty silly. If words mean whatever you want them to mean, then they mean nothing.

And that's the problem these discussions always have. No one speaks the same language. When you and I see bad things that happen in "capitalist" countries, we say "oh, well they weren't real free market nations, they drifted too far toward socialism" and when the others see horrible stuff that happens in "communist" countries they say "oh, well they weren't real Marxist nations, they incorporated too much capitalism".

So when I see things like the Opium Wars, and imperialism, and the like I figure the government has overstepped its bounds and these abuses wouldn't occur in "true" limited government, free market societies.

However hypocritical both sides are though, I think if you stack up the crimes done or aided by capitalism vs. those done by communism there would be a pretty stark choice.

[Felch]

You're right Ozzy.

The crimes aren't done by capitalism or by communism. There are no crimes done by Christianity or Islam or atheism. The crimes are done by human beings. And there's no ideology that can trump human nature.

[Blaupanzer]

An economy, small "e," can be said to fail if either, no other economy will take its currency, invest in its businesses, nor accept prices in whater currency, originating inside the failed economy. A second example is that the workforce will no longer work for remuneration from the elements of that economy. In both cases, these scenarios will only play out to the attention of the world if the government (political element) is also failing.

Separately, a problem in this discussion is the intermixing of a nation's economy and its government. Imperialism and militarism are much more political than economic. According to some fine post-WW II studies, colonies were never very profitable for the colonial powers themselves. Some corporations made fabulous profits, but the Governments would have been better off, economically, without the colonies.